The government on Friday dissolved Charles H. Keating Jr.'s Lincoln Savings and Loan Association, closing out the saga of the nation's most notorious and most expensive failed thrift.
The Resolution Trust Corp. transferred the 28 branches and $2.1 billion of deposits of the institution, based in Irvine, Calif., to Great Western Bank of Beverly Hills, Calif.The agency estimated the ultimate cost of the rescue at $2.6 billion, making it the costliest ever to taxpayers.
For many Americans, Keating, now under state criminal indictment in California, came to personify the thrift debacle. His aggressive lobbying to prevent regulators from rein-ing in his foundering institution ensnared five senators, the so-called Keating Five, in scandal.
Regulators seized Lincoln in April 1989 and offered it for sale four months ago. It will reopen for business Monday as part of Great Western, the nation's second-largest thrift with $39 billion in assets at the end of September.
Services to customers will continue without interruption and deposits will continue to be federally guaranteed up to $100,000 per account.
The trust corporation said Great Western's bid was the least costly to the government of 27 proposals. Great Western is paying $12.1 million for the right to acquire Lincoln's deposits but is purchasing only $6 million of its sour loans, real estate and other assets.
The agency has already advanced $1.9 billion in cash to cover Lincoln's losses while the S&L was under its control, and it will pay out another $2 billion to Great Western. It hopes to recover about $1.3 billion of that by selling Lincoln's assets, including The Phoenician, a lavish golf resort and spa near Scottsdale, Ariz.